The recent explosion of interest in adult tissue-specific progenitor cells has reinforced the principle that progenitor cells never function autonomously; their behavior is always governed by signals emanating from their unique spatial niche. Translating this principle to the pancreas, we propose that successful therapeutic targeting of pancreatic stem/progenitor cells will require effective characterization and manipulation of their corresponding mesenchymal niche. We are therefore proposing an innovative and highly integrated research program to identify, characterize and manipulate the pancreatic progenitor mesenchymal niche in adult and embryonic pancreas. The proposal is based on our recent identification of both a low-abundance, self-renewing, multi-lineage epithelial progenitor cell population in adult mouse pancreas, and a corresponding mesenchymal niche cell capable of promoting progenitor expansion. Based on these exciting findings, we are proposing the following central hypotheses: First, that unique population of mesenchymal niche cells exist embryonic and adult mouse pancreas. Second, that niche identify is defined by the production and secretion of specific soluble morphogens. Third, that characterization of the niche cell secretome will allow the identification of specific morphogens responsible for regulating the proliferation, differentiation and self-renewal of embryonic and adult pancreatic progenitor cells. To test these hypotheses, we are proposing three Specific Aims. Specific Aims 1 and 2 share parallel approaches applied to the embryonic pancreas in Aim 1 and to normal and regenerating adult pancreas in Aim 2. For both of these Aims, we will characterize and quantify the relative abundance of different pancreatic mesenchymal cell subpopulations, test their ability to regulate the proliferative expansion, differentiation and sel-renewal of pancreatic epithelial progenitor cells, and identify relevant components of the niche secretome responsible for these effects. Having identified specific niche cell populations and associated secreted morphogens responsible for niche function, experiments in Aim 3 will seek to genetically manipulate adult pancreatic mesenchymal niche cells, using a combination of Cre/lox and rtTA/TRE technology for mesenchyme-specific, doxycycline-inducible expression of ActivinA and other secreted morphogens. Together, these Aims will provide an entirely novel and integrated view of pancreatic mesenchymal development and pancreatic niche biology, setting the stage for eventual therapeutic manipulation of the adult pancreatic progenitor mesenchymal niche.